Remarks at the Dinner Celebrating the 10th Anniversary
of the Normalization of Vietnam's Relations with the International
Financial Institutions
David Burton Director, Asia and Pacific Department, IMFHanoi, Vietnam
October 22, 2003

Your Excellency, State Bank Governor Le Duc Thuy, senior officials
of the State Bank of Vietnam and other government agencies, distinguished guests,
ladies and gentlemen:

It is a very great pleasure to be here this evening, on my first visit
to Hanoi, to celebrate the 10th anniversary of the normalization
of Vietnam's relations with the international financial institutions (IFIs).
Normalization of relations in October 1993 was followed almost immediately
by approval of an IMF loan to Vietnam. This marked the beginning of a new period
of close cooperation between the IMF and Vietnam to which we at the IMF attach
the higest importance.

Vietnam has made impressive progress indeed with broad-based economic development
during the last 10 years. Output per capita (in US$) has increased by
some 140 percent; the share of the population in poverty has been halved;
exports have increased 6-fold, and are now diversified across a wide range
of products and markets. These achievements reflect the vision of the government
in moving forward steadfastly with its "doi moi" program. Key elements
of this approach that contributed to its success include: establishing and
then maintaining macroeconomic stability; steady integration into the global
economy; and the expanding role of market mechanisms in guiding economic
activity. The IMF has been pleased to be associated with this process of
reform.

Vietnam of course still faces important challenges if it is to maintain
its record of rapid growth and further poverty alleviation - challenges
that are fully recognized in the government's Comprehensive Poverty Reduction
and Growth Strategy (CPRGS). The global economy is increasingly competitive,
with some of the strongest competition here in Asia. For Vietnam to compete
successfully, resources for investment must be mobilized and used efficiently.
This will require banks that operate along commercial lines, enterprises
that respond to market incentives, the efficient provision by government
of the needed infrastructure, and a business climate supportive of private
investment. Progress has been made in all these areas, but much more remains
to be done. Also crucial will be continuing to maintain a stable macroeconomic
environment. And access to external markets must be ensured, for which WTO
membership can play an important part.

We in the IMF will be pleased to assist Vietnam in achieving its development
goals in the period ahead. We offer our broad international experience
on all issues relating to macroeconomic and financial sector stability -
areas that are our "core business". We hope that we can contribute
through policy dialogue, backed by our best efforts to understand the specific
circumstances of Vietnam; through the provision of technical assistance in
areas, such as tax policy and banking supervision, where we have specialist
expertise; and by providing financial support, as in recent years, through
our Poverty Reduction and Growth Facility.

This does not mean, of course, that we will necessarily see eye-to-eye
with the government on every issue. There have been times in the last
10 years where there have been differences of view between the IMF and the
government, usually on the appropriate pace of reforms rather than the general
approach that needed to be taken. Such differences of view, however, should
be seen as the sign of a healthy relationship in which both parties can learn
from one another, working together for common goals.

In closing, let me say that I am confident that Vietnam will achieve its
potential for economic development, continuing to raise rapidly standards
of living, especially of its poorest people. And we at the IMF stand ready
to help in any way we can in this vital endeavor.